I breathed a sigh of relief as I read the decision in Michigan v. EPA. In this case, the issues not resolved were more important than the issue on which the Court based its opinion.

This case could have been a big problem for future regulations on climate change at EPA. Instead, Supreme Court held that the Environmental Protection Agency needs to bolster its decision to regulate mercury emissions with some additional analyses regarding the costs and benefits of cutting emissions of that toxic pollutant by electric power plants. Given that the EPA has already expended extensive resources in studying the costs and benefits, the agency should be able to move through this process relatively quickly. And if past practice is guide, the agency will be allowed to correct this procedural defect while the rule remains in effect.

So what was the blockbuster issue not reached? The case concerned the costs and benefits of cutting mercury emissions at coal-fired power plants. It turns out that the best way to reduce mercury emissions, because mercury sticks to particles in the exhaust gases from power plants, is just to scrub emissions of fine particles. Mercury is hazardous to human health largely because it finds its way into fish that we eat. But cutting emissions at US power plants won’t have large effects on the amount of mercury in fish because there is already a lot of mercury in the environment and because most of the new mercury emissions from power plants occurs in foreign countries. On the other hand, cutting emissions of fine particles at U.S. coal plants will substantially reduce death and illness in downwind regions.

The health benefits of mercury reductions under the rule are small – EPA valued them at less than $10 million. By contrast, the health benefits of reducing fine particle emissions were estimated by the agency to be in the high tens of billions of dollars. Costs to industry of cutting mercury and associated fine particles were estimated at $9 billion. Thus industry costs and the co-benefits of the rule dwarf the benefits from cutting the targeted pollutant.

It’s a cliché that bad facts can make bad law, but sometimes they actually do. Would this be one of those times? EPA and other federal agencies have long considered all quantifiable costs and benefits, including ancillary benefits in their development of new regulations, with the goal of insuring that proposed rules increase social welfare. To some, Michigan looked like a case where the court might step in to alter this process, perhaps to insure that “primary” benefits of new regulations don’t get too far out of whack with compliance costs.

This might seem like a fairly unimportant and technical issue – after all, how often do rules with this strange mix of high costs, low primary benefits, but very high co-benefits occur? There is at least one other possible example of such a rule, currently winding its way through the regulatory process and it is at the center of President Obama’s climate change agenda. That rule, known as the Clean Power Plan, targets emissions of heat-trapping carbon dioxide from the nation’s electric power plants.

The Clean Power Plan will be costly to comply with for electric utilities and will create three distinct kinds of benefits – benefits from reduced warming in the U.S., which will be quite modest; benefits from reduced warming in other countries, which will likely be much larger than the cost of the rule; and benefits in the U.S. of reduced emissions of other pollutants that are emitted when fossil fuels are burned at U.S. power plant – i.e. co-benefits very similar to those at issue in the Michigan case. Here, as in Michigan, the co-benefits dwarf the direct benefits and will, like the international climate benefit, likely be much larger than the rule’s costs.

If the Supreme Court were to question the co-benefits in Michigan v. EPA, why not question the inclusion of international climate benefits and U.S. co-benefits for a rule that creates a tiny climate benefit for U.S. taxpayers, especially when compared to the costs of producing it? If some benefits count more than others, what’s to stop the Supreme Court from blocking climate regulations because U.S. climate benefits are tiny when that case comes before them in a few years time? That at any rate was the worry.

In keeping the decision in Michigan v. EPA to the narrow procedural track of how and when EPA considers costs in developing its regulation but leaving it up to the agency to determine what costs and benefits are considered, the court avoided a decision that might have served as precedent for blocking most, if not all regulation of greenhouse gases under existing law. Today, even though EPA lost, the air we breathe will continue to improve and the Obama Administration’s climate change agenda dodged a bullet.